A Third of New U.S. Homeowners Owe More Than Houses Are Worth, Zillow Says

from Bloomberg:



Many U.S. Homeowners Owe More Than House Is Worth, Zillow Says

By Bob Ivry

Aug. 12 (Bloomberg) -- Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.

Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said.

Negative equity and declining prices are making it difficult for homeowners to sell property for a profit. Almost one-quarter of U.S. homes sold in the past year were for a loss, Zillow said. That contributes to the foreclosure rate because some homeowners can't absorb the loss and end up surrendering their homes to the bank that holds the mortgage, said Stan Humphries, Zillow's vice president of data and analytics.

``For homeowners who need to sell, this is a gravely serious situation,'' Humphries said in an interview. ``It can also be harmful to communities where the number of unsold homes adds more to inventory and puts downward pressure on prices.''

The highest percentages of homeowners with negative equity were located in California. In four of the state's metropolitan areas -- Stockton, Modesto, Merced and Vallejo-Fairfield -- the number of homeowners whose mortgage debts exceeded the values of their properties topped 90 percent, Zillow said.

In five more California areas -- the Inland Empire (Riverside-San Bernardino), Bakersfield, Yuba City, El Centro and Madera -- the percentages were more than 80 percent. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a3uzhDOF9FXI&refer=home

You roll the dice,you pay the price.

but they were passed loaded dice.

Who didn't see the bubble popping? It was unsustainable price inflation.

No one was conned.

By 2004 our home was worth 6 times what we paid for it.
Now it's still probably worth 4 times as much.
I'd like to sell and get my equity out, but there's a glut of houses on the market here now.
I'd have to go well below what accepted 'market price' is being touted to move it.

Been here 22 yrs. Remodeled,upgraded,landscaped,etc. House is paid off, but can probably only sell it for what we have in it.So,will probably live here til I die.

You've got it the way you like it. Enjoy it. Step out of the real estate rat race.

But the wife wants more! LOL (eg) A brick bread oven in the back that I've already started the foundation for!

of the value to begin with! Seems like everybody was foolish enough to believe that housing prices world increase forever!

1. New regulations and standards are going to require that buyers show real income, a good credit history, and put down a sizeable down payment. This fact alone cuts down the pool of potential buyers because salaries for U.S. workers are stagnant, and the average salary CANNOT afford the AVERAGE price for a house.

2. Baby boomers start retiring en masse in another two years or so. This will also put downward pressure on home prices. Boomers have been using their homes for their retirement, and once these homes all start flooding the market at the same time, the prices will fall dramatically.

from finishing the mortgage payments.

Is the mortgage Co. going to pay to fix leaky pipes,leaky roof,etc.
Pay your insurance? Pay your taxes? YOU are responsible! I see part of your point, but @ closing, YOU are the homeowner.

We bought 17 years ago, saw triple in value, now it's still double in value, and worth triple what we owe on it. Which is of small interest to us because we love it here and have no intention of selling.